The Sierra Leone Licences comprise five exploration licences (EL.05/11, EL.06/11, EL.07/11, EL.08/11 and EL.09/11) for the exclusive right to explore for minerals in Sierra Leone over a total area of approximately 687 square kilometres.
The Sierra Leone Licences are held by wholly-owned subsidiaries of Ferrous Africa Limited, in which the Group holds a 100% interest. Ferrous Africa Limited holds a 25% interest in each Sierra Leone Licence in trust for the benefit of Sierra Resources Ltd., which is a free carried interest until completion of a definitive feasibility study on the respective Sierra Leone Licence. After that time, Sierra Resources Ltd. is required to fund project expenditure pro rata in respect of its interest or face dilution. The Group is the operator of the Sierra Leone Licences.
The four Sierra Leone Licences located in the north of the country (EL.06/11, EL.07/11, EL.08/11 and EL.09/11) are underlain by Archaean greenstone belt with potential for iron, gold and possible base metal mineralisation. The remaining concession, EL.05/11, in the south of Sierra Leone, occurs in a region postulated to be prospective for gold.
Iron was discovered in 1926 at Marampa and the Sierra Leone Development Company commenced iron mining in 1933. An estimated 92 million tonnes of iron at a grade of 37.8% Fe, together with 40 million tonnes of tailings containing 27.7% Fe, are estimated to remain. The Marampa deposits are formed by massive beds of specularite schist, interstratified with quartz-mica schists, of greenstone belt affinity. The formation has been traced north to Kukuna, near the international border with Guinea, and south towards Makalawa and Toma. The ferruginous province is known as the Marampa-Kukuna Belt and includes several iron ore projects, in particular the Kukuna and Marampa projects owned by Cape Lambert Resources Ltd.
Three of the northernmost Sierra Leone Licences are adjacent to or on strike of the Kukuna project, a haematite deposit with an exploration target of 1 to 2 billion tonnes at 30 to 40% Fe. The fourth Sierra Leone Licence in the north occurs on strike of the Marampa project of Cape Lambert, a brownfields exploration project located near the historic Marampa mine. The Marampa project has a total Mineral Resource of 680 million tonnes averaging 28.2% Fe.
In September 2011, Aeroquest (Pty) Ltd. conducted a 8,316 line kilometres low level, high resolution airborne magnetic and gamma spectrometric survey over the Sierra Leone licences. The resultant magnetic and radiometric data identified specific target areas for ground geophysics follow-up, geological mapping and drilling. The first phase of geological mapping and field traversing work has been completed on the licences areas.
At EL.05/11, the results of the airborne magnetic, radiometric surveys and initial geological mapping confirm that the concession comprises a complexly folded suite of lithologies, which includes BIF units and haematite schists. A series of eastwest striking dykes are identified and ground or airborne gravity surveys are recommended to identify non-magnetic haematite bearing lithologies.
The interpreted airborne magnetic and radiometric survey over the area of EL.07/11 generated a geology and structural map which indicates the presence of a north-northwest striking anticline with four magnetic units and the possible presence of haematite enriched targets in the core. The depth of the magnetite units varies between 20m and 75m below surface and targets have been selected for drilling.
In the area of the three northernmost licences (EL.06/11, EL.08/11 and EL.09/11), the airborne magnetic survey indicates the presence of near-surface, semi-horizontal magnetic units and vertical dyke-like bodies, within which twenty specific targets have been identified for follow-up. A priority target identified within EL.06/11 comprises a strongly magnetic unit extending north and south out-with the licence boundaries, at a depth of 70m below the cover. In addition to the potential ferruginous targets, several pipe-like anomalies may indicate the presence of magnetic mineral bearing kimberlite and carbonatite intrusions, which would be prospective for diamonds, rare earth elements and niobium. Reconnaissance follow-up of these bodies has been recommended.